LSE SECURITIES LIMITED Registered Office : SCO 50-51, 1St Floor, Sector 34-A, Chandigarh-160022

1. Company Details 2 2. Notice 3 3. Directors' Report 5 4. Auditors' Report 10 5. Annexure to Auditors' Report 11 6. Balance Sheet 13 7. Profit & Loss Account 14 8. Notes Forming Part of Balance Sheet 15 9. Notes to Financial Statements 20 10. Proxy 31

Venue 13th Annual General Meeting At Hotel Park View, Sector 24, Near Indira Holiday Home, Chandigarh.

1 COMPANY DETAILS

Mr. Vishal Goomber Chairman Mr. Pritpal Singh Chief General Manager Mr. Vijay Singhania Vice Chairman Ms. Ashima Arora Company Secretary Mr. Munish Sood Member Mr. Madhur Gupta HOD - IT Mr. Lalit Kishore Member Mr. Vinay Mahajan HOD - DP Mr. Sukhjiwan Rai Member Ms. Amanpreet Kaur HOD - Accounts - I Mr. Ajay Chaudhry Public Representative Director Mr. Vipen Goyal HOD - Clearing & Sett. Dr. Rakesh Kumar Gupta Public Representative Director Mr. Ravinder S. Saini HOD - Accounts - II Mr. Vinesh Kumar Public Representative Director Ms. Sonia Makkar HOD - KYC Mr. Ashish Aggarwal Public Representative Director Mr. Rajinder Pal Singh HOD - Margin Dr. Prem Kumar Public Representative Director Mr. Pawan Bhardwaj HOD - Membership Mrs. Pooja M. Kohli LSE Representative Director Ms. Paramjeet Kaur HOD - Surveillance & HR

Registered Office : Corporate Office : SCO-50-51, 1st Floor, Sector 34-A, 1st Floor, Ludhiana Stock Exchange Bldg., Chandigarh-160 022 Feroze Gandhi Market, Ludhiana-141 001 Tele No. : 0172-3258091 Tele No. : 0161-3011158, 5021018

Statutory Auditors : Internal Auditors : M/s. Anoop K. Goel & Co. M/s. R.K. Deepak & Co. Add: 152H, Lane 3, Adj. Jassal Engg. 527-R, 2nd Floor, Citi Tower, GTB Nagar, Chandigarh Road, Model Town, Ludhiana-141 002 Ludhiana-141 010

Trading cum Clearing Member : Depository Participants : National Stock Exchange of India Limited National Securities Depository Ltd. Bombay Stock Exchange Limited Central Depository Services (India) Ltd.

Trading Member : MCX-SX Stock Exchange

Bankers HDFC Bank, Oriental Bank of Commerce, Induslnd Bank, ICICI Bank, Yes Bank, Axis Bank, State Bank of India

Jalandhar -51 1st Floor, Milbertan Building, Opp. Govt. Girls Higher Secondary School, PNB Chowk, Jalandhar-144001. Ph. : 0181-5012689 Ferozepur Shop No. 39, Housing Board Colony, Commercial Area, H Ferozepur City-152002 Ph. : 01632-503438 Ph. : 01672-503281

Website : www.lse.co.in E-mail : [email protected] (for investors), [email protected], [email protected]

2 LSE SECURITIES LIMITED Registered Office : SCO 50-51, 1st Floor, Sector 34-A, Chandigarh-160022.

NOTICE

Notice is hereby given that the THIRTEENTH ANNUAL GENERAL MEETING of the Members of LSE SECURITIES LIMITED will be held on Saturday, the 15th day of September, 2012 at 12:30 P.M. at Hotel Park View, Sector 24, Near Indira Holiday Home, Chandigarh to transact the following business :

AS ORDINARY BUSINESS:

1. To receive, consider, and adopt the Audited Profit and Loss Account for the year ended 31st March, 2012 the Balance Sheet as at that date together with the Reports of the Board of Directors and Auditors thereon.

2. To declare dividend on Equity Shares.

3. To appoint a Director in place of Mr. Vijay Singhania, who retire by rotation in terms of Article 81(a) of Articles of Association of the Company and does not offer himself for the re-appointment.

4. To appoint a Director in place of Mr. Munish Sood, who retire by rotation in terms of Article 81(a) of Articles of Association of the Company and does not offer himself for the re-appointment.

5. To appoint Mr. Ajay Chaudhry, Public Representative Director, who retires at the conclusion of the Annual General Meeting. However, he shall continue in terms of Article 81(g) of Articles of Association of the Company till the new Public Representative is appointed in his place.

6. To appoint Mr. Ashish Aggarwal, Public Representative Director, who retires at the conclusion of the Annual General Meeting. However, he shall continue in terms of Article 81(g) of Articles of Association of the Company till the new Public Representative is appointed in his place.

7. To appoint Dr. Prem Kumar, Public Representative Director, who retires at the conclusion of the Annual General Meeting. However, he shall continue in terms of Article 81(g) of Articles of Association of the Company till the new Public Representative is appointed in his place.

8. To appoint Dr. Rakesh Kumar Gupta, Public Representative Director, who retires at the conclusion of the Annual General Meeting. However, he shall continue in terms of Article 81(g) of Articles of Association of the Company till the new Public Representative is appointed in his place.

9. To appoint Mr. Vinesh Kumar, Public Representative Director, who retires at the conclusion of the Annual General Meeting. However, he shall continue in terms of Article 81(g) of Articles of Association of the Company till the new Public Representative is appointed in his place.

10. To appoint Auditors to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting and to authorize the Board of Directors of the Company to fix their remuneration. M/s. Anoop Goel & Co. Chartered Accountants, the retiring Auditors are eligible for re-appointment as Statutory Auditors of the Company.

3 Notes:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/ HERSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE PROXIES, IN ORDER TO BE VALID AND EFFECTIVE, MUST BE DELIVERED AT THE REGISTERED OFFICE OF THE COMPANY AT LEAST 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. A PROXY SO APPOINTED SHALL NOT HAVE ANY RIGHT TO SPEAK AT THE MEETING.

2. Corporate Members are requested to send a duly certified copy of the Board Resolution, pursuant to Section 187 of the Companies Act, 1956, authorizing their representative to attend and vote at the Annual General Meeting.

3. The shares of the Company are held in physical form. Any member who transfers his shares to any person has to seek approval from the Board of the LSE Securities Limited subject to prior approval from BSE, NSE and MCX-SX Stock Exchanges.

4. The dividend declared, if any, will be paid to those Share-Holders whose names appear in the Register of Members after affecting the valid transfer requests lodged and affected by the Company on or before up to 08.09.2012 (Saturday) upto 05:30 P.M. subject to approval of NSE, BSE, MCX Stock Exchanges.

5. The Register of Members and the Share Transfer Book of the Company will remain closed from 10.09.2012 (Monday) to 14.09.2012 (Friday) for ascertaining the names of the Shareholders to whom the dividend which if any declared at the Annual General Meeting is payable.

6. Members are requested to write to the Company at least ten days before the meeting for obtaining any information as regards to accounts and operations of the Company so that the same could be complied in advance.

7. Members are requested to bring their copy of Annual Report along with them to the Annual General Meeting.

By order of the Board FOR LSE SECURITIES LIMITED

-Sd/- PLACE : LUDHIANA ASHIMA ARORA DATE : AUGUST 14, 2012 COMPANY SECRETARY

4 DIRECTORS' REPORT

Dear Shareholders,

Your Directors have great pleasure in submitting the Thirteenth Annual Report along with the Audited Accounts of the Company for the year ended 31st March, 2012.

1. REVIEW OF OPERATIONS Your Company's performance during the year as compared with that during the previous year is summarized below. (Amount in Lacs) Sr.No. PARTICULARS 31.03.2012 31.03.2011 1. Profit Before Depreciation, Interest and Tax (PBDIT) 266.20 266.55 2. Depreciation (15.06) (20.30) 3. Interest NIL Nil 4. Profit Before Tax (PBT) 251.14 246.25 5. Provision for Taxation a. Current (74.42) (82.00) b. Deferred 1.12 0.80 c. Earlier Years 3.02 (0.18) 6. Profit After Tax (PAT) 180.86 164.87 7. Balance brought forward from previous years 687.00 582.71 Planned Gratuity Assets belonging to F. Y. 0 0 8. Profit available for appropriation 867.86 747.58 9. Appropriations a. Proposed Dividend i) Interim Dividend (32.21) (32.08) ii) Dividend on Equity Shares (25.77) (19.24) iii) Dividend on Preference Shares (0.63) (0.63) b. Corporate Dividend Tax (9.51) (8.63) 10. Surplus carried to Balance Sheet 799.74 687.00 11. Earning Per Share (EPS) a. Basic 2.81 2.57 b. Diluted 2.81 2.57

2. OPERATING RESULTS During the year under review, the Company has earned Profit before Depreciation, Interest and Tax (PBDIT) of 266.20 Lacs and earned Gross income of 546.62 Lacs in the current year.

Profitability Your Company’s net profits after tax is 180.86 Lacs. Your Company's accumulated profits available for appropriation are 867.86 Lacs as compared to 747.58 Lacs in the corresponding previous year. Similarly, the net worth of the Company as on 31.03.2012 stood at 1535.99 Lacs as compared to 1423.25 Lacs during the corresponding previous year.

5 Turnover During the year under review, your Company has been able to achieve an average daily turnover of 18.94 Crores in "Capital Market" (CM) & 361.12 Crores in Futures & Options" (F&O) Segments of National Stock Exchange of India Limited and 9.16 Crores in "Capital Market (CM) Segment of the Bombay Stock Exchange Limited, Mumbai. Further Depository Income as on 31.03.2012 is 128.06 Lacs.

3. DIVIDEND Your Directors' feel glad to share that an interim dividend @ 5% was paid to the Equity shareholder of the Company amounting to 32.21 Lacs. Further, the Board of Directors has recommended payment of final dividend @ 4% on Equity Shares for the financial year ended 31.03.2012. The total dividend outgo including interim dividend, preference dividend and tax thereon will be 68.12 Lacs as against 60.58 Lacs in the corresponding previous year.

4. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT a) Trading at NSE and BSE in Capital Market Segment During the year under review, your Company has recorded a turnover of 4716.23 Crores and 2280.98 Crores in Capital Market Segment of the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited, Mumbai respectively. As on 31.03.2012, there have been total 170 SEBI Registered Sub-Brokers of the Company in NSE and 126 SEBI Registered Sub-Brokers in BSE. b) F&O Segment of NSE During the year under review, your Company has recorded a turnover of 89920.47 Crores in the Futures & Options Segment of National Stock Exchange of India Limited. c) Currency Segment The turnover in Currency Derivatives was 503.46 Crores in NSE and 81.92 Crores in MCX Stock Exchange Limited during the year. d) Depository Participant Services The business of the Depository Participant (DP) is increasing day by day. During the year under review, your Company has opened 1102 new accounts in CDSL, 37 accounts in NSDL and 81 accounts in Commodities. e) Client Registration Department During the year under review, your Company has registered 996 clients and successfully implemented all compliances as framed by SEBI, NSE, BSE and MCX Stock Exchanges. f) Future Outlook Your Company has applied for the membership of BSE Derivative Segment and the same is under process with SEBI. The Company is expected to receive the approval from SEBI very soon and after commencement of trading by the Company in BSE Derivative Segment the business of the Company is expected to grow.

Your Company has also got empaneled with NCDEX for opening of Demat Accounts with respect to Agri-Based Commodities through CDSL for which company has been receiving good response.

6 5. COMPOSITION AND CATEGORY OF THE DIRECTORS

NAME OF THE DIRECTOR CATEGORY DESIGNATION Mr. Vishal Goomber Non-Executive Director Chairman Mr. Vijay Singhania Non-Executive Director Vice-Chairman Mr. Munish Sood Non-Executive Director Member-Director Mr. Lalit Kishore Non-Executive Director Member-Director Mr. Sukhjiwan Rai Non-Executive Director Member-Director Mr. Ajay Chaudhry Independent and Non-Executive Director Public Representative Director Dr. Rakesh Kumar Gupta Independent and Non-Executive Director Public Representative Director Mr. Vinesh Kumar Independent and Non-Executive Director Public Representative Director Mr. Ashish Aggarwal Independent and Non-Executive Director Public Representative Director Dr. Prem Kumar Independent and Non-Executive Director Public Representative Director Mrs. Pooja M. Kohli Non-Executive Director LSE Representative Director

At present, Mr. Vishal Goomber, Mr. Vijay Singhania, Mr. Munish Sood, Mr. Sukhjiwan Rai and Mr. Lalit Kishore are the Member-Directors on the Board of the Company and in accordance with Article 81(a) of the Articles of Association of the Company. Mr. Vijay Singhania and Mr. Munish Sood being longest in the office liable to retire by rotation at the ensuing Annual General Meeting and does not offer themselves for the re-appointment. Such elected Director on the Board of the Company shall have a gap of at least one year after a consecutive period of two years before their re-appointment on the Board of Directors.

Therefore, there are two vacancies of Directorship which are to be filled among Member-Directors in the ensuing Annual General Meeting of the Company.

Presently, Dr. Prem Kumar, Mr. Ajay Chaudhry, Mr. Ashish Aggarwal, Dr. Rakesh Kumar Gupta and Mr. Vinesh Kumar are the Public Representative Directors on the Board of the Company and shall continue to hold the office of the Board of the Company in terms of Article 81(g) of the Articles of Association.

Your Directors place on record the appreciation for sincere, dedicated and valuable services rendered to the Company by Mr. Vijay Singhania and Mr. Munish Sood during their tenure.

6. CORPORATE GOVERNANCE

AUDIT COMMITTEE The Audit Committee of your Company comprises of Mr. Ajay Chaudhry as Chairman followed by Mr. Vinesh Kumar, Mr. Satish K. Bansal, Mr. Rajiv Gupta, Mr. Ashish Aggarwal, Mr. Vishal Goomber, Mr. Sanjay Anand, Mr. Sudhir Kumar and Mr. Jaspal Singh as Members of the Committee. The Audit Committee has reviewed the Final Accounts of the Company before these were submitted for the consideration of the Board.

COMPUTER COMMITTEE The Computer Committee of your Company comprises of Mr. Munish Sood as Chairman followed by Mr. Jatinder Garg, Mr. Vineet Suri, Mr. Sukhjiwan Rai, Mr. Rakesh Gupta, Mr. Jaspal Singh, Mr. Vishal Goomber, Mr. Rakesh Jain and Mr. Harish Nagpal as Members of the Committee.

HUMAN RESOURCE MANAGEMENT COMMITTEE The Human Resource Management Committee of your Company comprises of Mr. Jaspal Singh as Chairman followed by Mr. Vishal Goomber, Dr. Rakesh Kumar Gupta, Mr. Ajay Chaudhry, Mr. Tarvinder Dhingra, Dr. Prem Kumar, Mr. T.S Thapar, Mr. Vijay Singhania, Mr. Munish Sood, Mr. Sukhjiwan Rai and Mr. Ashwani Kumar Aggarwal as Members of the Committee.

7 TRADING BUSINESS DEVELOPMENT COMMITTEE The Trading Business Development Committee of your Company comprises of Mr. Vishal Goomber as Chairman followed by Mr. Harish Nagpal, Mr. Anil Aggarwal, Mr. Munish Sood, Mr. Dheeraj Ghai, Mr. Lalit Kishore, Mr. Vijay Singhania, Mr. Harish Chander Kohli, Mr. Ashish Aggarwal and Mr. Chanpreet Singh as Members of the Committee.

RISK MANAGEMENT COMMITTEE The Risk Management Committee of your Company comprises of Mr. Vishal Goomber as Chairman followed by Mr. Jaspal Singh, Mr. Vinesh Kumar, Mr. Sudhir Kumar, Mr. Ashish Aggarwal, Mr. Ashwani Aggarwal, Mr. Sanjay Anand, Mr. Rakesh Gupta, Mr. Anil Aggarwal, Dr. Prem Kumar, Mr. Vijay Singhania, Mr. Munish Sood, Mr. Vijay Vinod, Mr. Sridhar Mallawat, Mr. Ajay Batra, Dr. Rakesh Kumar Gupta, Mr. Pramod Goyal, Mr. Harikrishan Punni and Mr. Sudhir Sharma as Members of the Committee.

SHARE TRANSFER COMMITTEE The Share Transfer Committee of your Company comprises of Mr. Sukhjiwan Rai as Chairman followed by Mr. Munish Sood, Mr. Lalit Kishore and Mr. Ashish Aggarwal as Members of the Committee.

DEPOSITORY BUSINESS COMMITTEE The Depository Business Committee of your Company comprises of Mr. Vijay Singhania as Chairman followed by Mr. Munish Sood, Mr. Vishal Goomber, Mr. Sukhjiwan Rai, Mr. Vikas Batra, Mr. Pankaj Kumar, Mr. Mukesh Jain, Mr. Ravi Gupta, Mr. Dheeraj Ghai, Dr. Rakesh Kumar Gupta and Mr. Sudhir Sharma as Members of the Committee.

7. CONSERVATION OF ENERGY The Company is engaged in stock broking, depository activities and has no activity pertaining to manufacturing and as such furnishing of details as required under Section 217(1) (e) of the Companies Act, 1956 regarding conservation of energy is not applicable.

8. TECHNOLOGY ABSORPTION The particulars as prescribed under Section 217 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars In The Report of Board of Directors) Rules, 1988, in respect to technology absorption are nil.

9. FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars as prescribed under section 217 (1) (e) of the Companies Act 1956, read with the Companies (Disclosure of Particulars In The Report of Board of Directors) Rules, 1988, in respect to foreign exchange earnings and outgo are nil.

10. PARTICULARS OF EMPLOYEES Pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, none of the employees of the company is in receipt of remuneration, which requires disclosure under the said Section.

11. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to provisions of Section 217(2AA) of the Companies (Amendment) Act, 2000, the Directors based on the representation received from the operating management, confirm that:

1. The annual accounts presented to the members have been prepared on going concern basis and applicable accounting standards have been followed. 2. In case of any material departures from the applicable accounting standards, proper explanations have been provided.

8 3. In order to provide a true and fair view of the state of affairs of the Company for the year ended 31.03.2012, and profits for the year ended on that date reasonable and prudent judgments and estimates have been made and generally accepted accounting policies have been selected and consistently applied. 4. For safeguarding the assets of the Company and for preventing and detecting any material fraud and irregularities, proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956.

12. COMPLIANCE TO ACCOUNTING STANDARDS The Company during the year has complied with Accounting Standards issued by the Institute of Chartered Accountants of India as applicable to the Company.

13. AUDITORS' M/s Anoop K. Goel & Co., Chartered Accountants, the Statutory Auditors of the Company, shall retire at the conclusion of the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

14. AUDITORS' REPORT The Auditors' Report read with Notes on Accounts is self-explanatory and does not call for further comments, as there are no adverse remarks in the Auditors' Report.

15. PERSONNEL Your Directors place on record the heartiest appreciation for the sincere, devoted and dedicated services rendered by the staff for the smooth functioning of the Company, its growth and implementation of new systems necessitated by the structural changes brought in the Capital Market by SEBI, NSE, BSE and MCX Stock Exchanges from time to time.

16. ACKNOWLEDGEMENT The Board wishes to place on record its gratitude for the kind co-operation, assistance and continued support to the Company by the office-bearers, Sub-Brokers, Members and officials of the Ludhiana Stock Exchange Limited, the Ministry of Finance, Central Government, the Securities and Exchange Board of India (SEBI), the Government of Punjab, Local Administration, the National Stock Exchange of India Limited (NSEIL), the Bombay Stock Exchange Limited, Mumbai (BSE), MCX Stock Exchange and other Stock Exchanges and their Subsidiary Companies, the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) and other business associates. Your Company is deeply grateful to the Shareholders of the Company who has shown their confidence and faith towards the Company.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

PLACE: LUDHIANA -Sd/- DATE: AUGUST 14, 2012 VISHAL GOOMBER CHAIRMAN

9 AUDITORS' REPORT

The Members, LSE Securities Limited

1. We have audited the attached Balance Sheet of LSE Securities Limited as at 31st March, 2012 and the related Profit & Loss Account of the Company for the year ended on that date annexed thereto which we have singed under reference to this report. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books ; iii. The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account. iv. In our opinion, these accounts have been prepared in compliance with the applicable accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; v. On the basis of written representations received from the Directors, as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2012 from being appointed as a Director in terms of Clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; vi. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto and statement on significant accounting policies given in the prescribed manner, the information required by the Act, and also give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012; and b. in the case of the Profit & Loss Account of the net profit for the year ended on that date;

For ANOOP K. GOEL & CO. Chartered Accountants, (Firm Registration No. 016327N)

PLACE: LUDHIANA Anoop Kumar (Partner) DATE : AUGUST 14, 2012 Membership Number : 096966

10 ANNEXURE TO THE AUDITORS' REPORT

(Referred to in Paragraph 3)

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us the fixed assets have been physically verified by the management during the year. No material discrepancies were noticed on such physical verification. In our opinion, the frequency of physical verification of fixed assets is reasonable with regard to the size of the Company and nature of its business.

(c) According to the information and explanations given to us, the Company has not disposed off substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) The Company's nature of operations does not require it to hold inventories. Accordingly, clause 4(ii) of the Companies (Auditors' Report) Order, 2003 (`the Order') is not applicable. However the Company held stock of saleable stationery as at 31-03-2012, valued at cost or net realisable value, whichever is lower.

(iii) The Company has neither granted nor taken any loans, secured or unsecured, from companies, firms or other parties listed in the Register maintained under Section 301 of the Act, paragraphs 3(b), 3(c) , 3(d), 3(f) and 3(g) of the Order, are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and the sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the Internal Control System during the course of the Audit.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public and consequently, the directives issued by Reserve Bank of India, the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under are not applicable.

(vii) In our opinion, the Company has an Internal Audit System commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of services carried out by the Company.

(ix) (a) According to the information and explanations given to us, and on the basis of our examination of the books of accounts, the Company has been regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, customs duty, investor education and protection fund, wealth tax and any other material statutory dues applicable to it.

(b) According to the information and explanation given to us there is no undisputed amounts payable in respect of Income Tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31.03.2012 for a period of more than six month from the date thy became payable.

11 (c) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited in account of any dispute.

(x) The Company has neither accumulated losses as at March 31, 2012, nor it has incurred any cash losses during the financial year ended on that date and the immediately preceding financial year.

(xi) Based on our audit procedures and on the information and explanations given by the management, in our opinion, the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date.

(xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4 (xii) of the order is not applicable.

(xiii) The company is not a chit fund, nidhi, mutual benefit fund or a society. Accordingly, clause 4 (xiii) of the order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments in its own name, but it is a member of BSE, NSE and MCX-SX Stock Exchanges and trading & dealing in shares, securities, debentures and other investment through its sub-brokers only, therefore, clause (xiv) is not applicable on it.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks or financial institutions. Accordingly, clause (xv) of the order is not applicable.

(xvi) The Company has not obtained any term loan, accordingly clause (xvi) of the order is not applicable.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the no funds raised on short term basis have been used for long term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to the parties covered in the register maintained under Section 301 of the Act and the price at which such shares have been allotted, is not detrimental to the interest of the company.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures accordingly clause (xix) of the order is not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, clause 4(xx) of the order is not applicable.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For ANOOP K. GOEL & CO. Chartered Accountants, (Firm Registration No. 016327N)

PLACE: LUDHIANA Anoop Kumar (Partner) DATE : AUGUST 14, 2012 Membership Number : 096966

12 LSE SECURITIES LIMITED BALANCE SHEET ST AS AT 31 MARCH 2012 Amount In ( )

PARTICULARS NOTE As At 31.03.2012 As At 31.03.2011

I EQUITY AND LIABILITIES (1) Shareholders' funds (a) Share capital 2 65,208,210 65,208,210 (b) Reserves and Surplus 3 89,181,496 77,907,275

(2) Non-Current Liabilities (a) Other Long Term Liabilities 4 40,725,000 46,935,000 (b) Long term provisions 5 418,852 468,504 (c) Deferred Tax Liability 6 224,000 336,000

(3) Current Liabilities (a) Trade Payables 7 170,824,590 190,501,267 (b) Other Current Liabilties 8 1,883,803,144 2,261,227,888 (c) Short Term provisions 9 3,068,278 6,058,364

TOTAL 2,253,453,570 2,648,642,508

II ASSETS (1) Non Current Assets (a) Fixed Assets 10 Tangible Assets 2,564,449 3,450,533 Intangible Assets 329,348 576,716 (b) Non Current Investments 11 10,000 2,010,000 (c) Long term loans and advances 12 49,903,374 48,723,784 (d) Other Non Current Assets 13 3,704,693 1,872,248

(2) Current Assets (a) Current Investments 14 3,500,000 19,500,000 (b) Inventory 15 20,220 97,765 (c) Trade Receivables 16 123,248,535 122,231,981 (d) Cash and bank balances 17 253,784,843 349,973,669 (e) Short term Loans and advances 18 2,700,444 1,121,379 (f) Other Current Assets 19 1,813,687,664 2,099,084,433

TOTAL 2,253,453,570 2,648,642,508

Significant Accounting Policies 1.1 See Accompanying Notes to the Financial Statements

As per our report of even date attached For and on Behalf of The Board of Directors

For Anoop K. Goel & Co. Chartered Accountants (Firm Registration No. 016327N) Vishal Goomber Vijay Singhania Chairman Vice Chairman (ANOOP KUMAR) PARTNER MEMBERSHIP NO. 096966 Pritpal Singh Amanpreet Kaur Chief General Managar Asst. General Manager - Finance PLACE : LUDHIANA DATE : AUGUST 14, 2012

13 LSE SECURITIES LIMITED PROFIT AND LOSS ST FOR THE YEAR ENDED 31 MARCH 2012 Amount In ( ) For the year ended For the year ended PARTICULARS NOTE 31.03.2012 31.03.2011 I Revenue from operations 20 29,936,454 33,173,144 II Other Income 21 24,725,685 21,957,680

III Total Revenue 54,662,139 55,130,824

IV Expenses Operating Expenses 22 2,934,014 4,707,813 Employee Benefit expenses 23 12,220,889 12,291,893 Finance Cost 24 135,743 288,502 Depreciation and amortization expenses 1,505,933 2,029,859 Other expenses 25 12,751,513 11,187,472

Total Expenses 29,548,092 30,505,539

V Profit before Tax (III-IV) 25,114,047 24,625,285

VI Tax Expense : 1) Current Tax Expense for Current Year 7,442,000 8,200,000 2) Tax relating to prior years (301,849) 17,613 3) Deferred Tax (112,000) (80,000)

VII Profit for the year (V-VI) 18,085,896 16,487,672

VIII Earning per Share (of Rs. 10 each) Basic 2.81 2.57 Diluted 2.81 2.57

Significant Accounting Policies 1.1 See Accompanying Notes to the Financial Statements

As per our report of even date attached For and on Behalf of The Board of Directors

14 LSE SECURITIES LIMITED NOTES FORMING PART OF BALANCE SHEET AS AT 31st MARCH 2012

1. SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS 1.1 SIGNIFICANT ACCOUNTING POLICIES

?Accounting Convention The accompanying financial statements are prepared and presented under the historical cost convention, on the basis of accounting principles and comply with the Accounting Standard prescribed by Companies ( Accounting Standards) Rules 2006, the relevant provisions of the Companies Act, 1956 and the Revised Schedule VI to the Act, which has become effective from the current year. Figures of the previous year have been redrawn to conform to the Revised Schedule VI classification.

?Revenue Recoginition a) The Company follows accrual system of accounting in accordance with the normally accepted accounting principles. Income in respect of zero holding depository accounts is accounted for at the time of reasonable certainty of its collection.

b) Brokerage income on securities and commodities broking business is recognised as per contracted rates at the execution of transactions on behalf of customers on the trade date and is reflected net of related brokerage expenses and service tax.

c) Interest Income is recognised using time proportion method.

d) Dividend income is recognised when the right to receive payment is established.

?Fixed Assets Fixed assets are stated at historical cost less depreciation. The cost of fixed assets comprises purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

?Intangible Assets and Amortization Intangible assets of the Company such as software and software licences are amortised on straight line basis over a period of 5 years, being the useful life as estimated by the management, beginning with the year in which the said assets are put to use.

?Depreciation Depreciation is provided on written down value method as per the rates prescribed in schedule XIV of The Companies Act,1956 on all the assets of the Company. In respect of assets sold, depreciation is provided upto the date of disposal.

All fixed assets individually costing less than Rs 5000 are fully depreciated in the year of installation.

?Inventories Inventories are valued at cost or net realizable value whichever is lower and cost for the same is determined on the basis of FIFO Method.

15 ?Employee Benefits

DEFINED CONTRIBUTION PLAN Contributions to Provident Fund and Employees State Insurance are recognized in the accounts as per the statutory requirements under the relevant Act.

DEFINED BENEFIT PLAN a. Gratuity: The Company makes contribution to a scheme administered by the Life Insurance Corporation of India (LIC) to discharge gratuity liabilities to the employees. The Company accounts its liability for future gratuity benefits based on independent actuarial valuation as at the balance sheet date, using Projected Unit Credit Method.

b. Leave Encashment : The eligible employees are permitted to carry forward certain number of their annual leave entitlement to subsequent years, subject to a ceiling. Company also provides for the encashment of leave subject to rules. The liability is provided on the number of days of unutilised leave at each balance sheet date.

?Membership Entrance Fee With NSE/BSE The Membership Fee paid to NSE/BSE for acquiring trading rights at these Exchanges has been shown under the head Security Deposits in Non-Current Loans & Advances.

?Investment Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current Investments are stated at lower of cost and fair value. Long term investments are stated at cost of acquisition. Provision for diminution is made when such diminution is considered other than temporary in nature. Valuation is determined on the basis of each category of investments.

?Taxation a. Current tax is determined on the profit for the year in accordance with the provisions of the Income Tax Act, 1961.

b. Deferred tax is calculated at the rates and laws that have been enacted or substantively enacted as of the Balance Sheet date and is recognized on timing difference that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that they can be realized.

?Earning Per Share The Company reports basic and diluted earning per share (EPS) in accordance with accounting standard 20 on “Earnings Per Share”. Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

?Impairment of Assets At each Balance Sheet an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account. The recoverable amount of assets exceeds carrying amount of assets and as such there is no impairment of assets.

16 ?Margin Money In the Form of FDRs The Company has a procedure of receiving FDRs from its Sub-Brokers/ Clients as margins. Such Fixed Deposits are issued by the Bank in favour of NSCCL A/c LSE Securities Limited in case of NSE and Bombay Stock Exchange Limited A/c LSE Securities Limited in case of BSE. The Company deposits these FDRs with the concerned Stock Exchange as Additional Capital/ Margin Money. The issuing bank credits the Interest earned/accrued on such FDRs after deduction of TDS to the account of the concerned Sub-Brokers/ Clients. As such, the interest on such FDRs has not been accrued to the Company’s account.

?Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Contingent Liabilities are not recognised, but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

1.2 NOTES TO ACCOUNTS The Company has deposited FDRs in its name with National Stock Exchange of India amounting to Rs. 110400000 (Prev. Year Rs. 210261559) and with Bombay Stock Exchange of India amounting to Rs. 41000000 (Prev. Year Rs 36000000) for Base Minimum/Additional Capital and are shown under the head Fixed Deposit with scheduled banks.

FDRs of Rs. 66493000 (Prev. Year Rs. 70953041.74) have been pledged with HDFC Bank to secured overdraft facilities to the tune of Rs. 5.98 Cr (P/Y 6.40 Cr).

?Secured Debtors The Sundry Debtors relating to the Clients Trading in Securities through the Company are secured against their securities lying with the Company and under the Clause 15 of the Tripartite Agreement between LSE Securities Limited and its Sub-Brokers and Clients.

?Employee Benefits : i) Defined Contribution Plan : Company contribution to provident fund Rs. 912077 (Previous Year Rs. 884593)

ii) Defined Benefit Obligation :

(a) Liability/Asset recognized in the balance sheet Defined Benefit Defined Benefit Plan Gratuity Funded Plan Gratuity Funded as on 31.03.2012 as on 31.03.2011 Present value of obligation, beginning of the Year 2016491 1629458 Interest cost 161319 126962 Current service cost 258942 201397 Benefits paid (337180) 0 Actuarial loss on obligations 129446 101101 Present value of obligation, end of the Year (A) 2229018 2058918

Fair value of plan assets, beginnig of the year 2257081 1698553 Expected return on plan assets 204785 171684 Contributions 361528 334562 Benefits paid -337180 0 Actuarial gain / (loss) on plan assets 0 0 Fair value of plan asset at the end of the year (B) 2486214 2204799 Amount recognized in balance sheet (A-B) (257196) (145881)

17 (b) Expenses during the year

Current service cost 258942 201397 Interest cost 161319 126962 Expected return on plan assets (204785) (171684) Net actuarial (gain)/loss recognized in the year 129446 101101 Expenses recognized in statement of profit & loss 344922 257776

As on 31.03.2012 As on 31.03.2011

Discount Rate 8% 8% Salary Escalation 7% 7%

There is a difference of Rs. 52282 and Rs. 42427 between opening balance of current year and closing balance of previous year in Planned Gratuity assets and Gratuity Obligation respectively, as per the certificate obtained from LIC The total difference of Rs. 94709 has been adjusted in the gratuity expenditure debited to Profit & Loss Account.

?Earnings Per Share In accordance with Accounting Standard20- Earnings Per Share prescribed by Companies (Accounting Standards) Rules 2006, the computation of earnings per share is set out below :

As on 31.03.2012 As on 31.03.2011

a) Face Value per Share 10.00 10.00 b) Net Profit after Tax 18,085,896.00 16,487,672.00 c) Weighted Average No. of Shares 6,441,775.00 6,415,272.00 d) Earnings per share (Basic and Diluted) 2.81 2.57

?Contingent Liability The Company has issued a Bank Guarantee to the extent of Rs. 1 Cr in favour of Bombay Stock Exchange Limited against which FDRs amounting to Rs 50 Lacs, as 50% margin , have been pledged with HDFC Bank.

?Investments

As on 31.03.2012 As on 31.03.2011

Aggregate Amount of Investment in Unquoted Mutual Fund Non Current Cost 0 2,000,000 Market Value 0 2,001,395

Current Cost 3,500,000 19,500,000 Market Value 3,764,948 19,770,317

Market Value of Investment in unquoted mutual fund represents the repurchase price of the units issued by the respective Asset Management Company at the NAV declared and applicable for 31st March.

18 ?Related Party Disclosures - As identified by the management and relied upon by the auditors

(a) List of related parties and description of relationship

I. Holding company

?Ludhiana Stock Exchange Ltd.

II. Key managerial personnel

?Rajesh Sharma - Chief Executive Officer ?Kajal Rai - AGM cum CS ?Pritpal Singh - Chief General Manager

(a) Related Party Transaction

Holding Key Managerial Total Personnel (Figures in ) Rent (Incl. of Taxes) 3906047 - 3906047 Interim Dividend 1665538 - 1665538 Remuneration 0 733529 733529

Total 5571585 733529 6305114

?Capital Commitment

Capital Commitment (Net of Advances) Rs. 9.40 Lacs (Previous Year NIL.)

?Figures of the previous year have been regrouped/rearranged/reclassified to make them comparable with the current year’s figures, wherever considered necessary.

Figures have been rounded off to the nearest rupee value.

19 LSE SECURITIES LIMITED NOTES TO FINANCIAL STATEMENTS ST FOR THE YEAR ENDED 31 MARCH 2012 Amount In ( )

PARTICULARS As At 31.03.2012 As At 31.03.2011

2. SHARE CAPITAL

AUTHORISED 130,00,000 Equity Shares (Previous Year 1,30,00,000 Shares) of Rs 10/- each (Par Value) 130,000,000 130,000,000 20,00,000 8% Cumulative Redeemable Preference Shares of Rs 10/-each (Par Value) 20,000,000 20,000,000 150,000,000 150,000,000 ISSUED, SUBSCRIBED AND PAID UP 6441775 Equity Shares of Rs.10/- each Fully Paid Up (Previous Year 6441775 Equity Shares of Rs.10 each) 64,417,750 64,417,750 79046, 8% Cumulative Redeemable Preference Shares of Rs 10/-each 790,460 790,460

TOTAL 65,208,210 65,208,210

Reconciliation of number of shares outstanding a) Equity Shares No. of Shares Amount No. of Shares Amount

Outstanding at the beginning of the year 6441775 64417750 6351275 63512750 Issued during the year 0 0 90500 90500 Outstanding at the end of the year 6441775 64417750 6441775 64417750

b) Preference Shares No. of Shares Amount No. of Shares Amount

Outstanding at the beginning of the year 79046 790460 79046 790460

Outstanding at the end of the year 79046 790460 79046 790460

Details of Preference Shares 8% Cumulative Preference Shares are redeemable at par on expiry of six years from the date of allotment i.e August 7,2006.

Terms / Rights attached to Equity Shares The Company has only one class of equity shares having par value of Rs.10 per share. Each holder of the equity share is entitled to one vote per share. In the event of liquidation of the company , the holders of equity share will be entitled to receive the remaining assets of the company, after distribution of all preferential amount.

Details of Shares held by shareholders holding more than 5% of the aggregate shares in the company.

No. of Shares Percentage No. of Shares Percentage

LUDHIANA STOCK EXCHANGE LTD. (Holding Company) 3331075 51.71 3331075 51.71

20 Amount In ( ) PARTICULARS As At 31.03.2012 As At 31.03.2011

3. RESERVES & SURPLUS

General Reserve - As Per Last Year Balance Sheet 5,138,330 5,138,330

Securities Premium - As Per Last Year Balance Sheet 4,068,875 3,408,875 Addition during the year 0 660,000 Total 4,068,875 4,068,875

Surplus in statement of Profit & Loss Account Opening Balance 68,700,070 58,270,762 Add: Profit for the year 18,085,896 16,487,672 Amount available for appropriation 86,785,966 74,758,434 Less: Appropriations : Interim Dividend 3,220,888 3,207,636 Proposed Dividend on equity shares 2,576,710 1,924,582 Dividend on preference shares 63,237 63,237 Distribution Dividend Tax 950,840 862,909 Closing Balance 79,974,291 68,700,070

Total 89,181,496 77,907,275

4. Other Long Term Liablities

Deposits from Sub-Brokers 39,425,000 45,585,000 Deposits with IL&FS for Future Currency 1,300,000 1,350,000

40,725,000 46,935,000

5. Long Term Provisions

Provision for employee benefits 418,852 468,504 Leave Encashment 418,852 468,504

6. Deferred Tax Liability (NET)

a) Deferred Tax Liability - On account of depreciation of Fixed Assets 292,000 398,000 - On account of Disallowance U/S 40 A(7) of The Income Tax Act 1961 84,000 48,000 376,000 446,000 b) Deferred Tax Asset - On account of Disallowance U/S 43B of The Income Tax Act (152,000) (110,000) 224,000 336,000

7. Trade Payables

Sundry Creditors NSE 866,666 1,119,936 Sundry Creditors NSE FC 228,718 372,183 Sundry Creditors Broking Clients 169,189,199 188,469,141 Sundry Creditors Other 540,007 540,007

170,824,590 190,501,268

21 Amount In ( ) PARTICULARS As At 31.03.2012 As At 31.03.2011

8. Other Current Liabilties

Deposits from Sub-Brokers (Kept with the principal Stock Exchanges as margins) (A) Bombay Stock Exchange Limited, Mumbai (BSE) In form of FDRs 41,195,873 62,265,659 In form of Funds 6,346,970 4,834,138

(B) The National Stock Exchange of India Limited (NSE) In form of FDRs 322,062,864 323,590,680 In form of Funds 80,540,980 133,053,244 In form of Scrips 114,253,539 113,646,858

(D) Security Deposit from Members Scrips held on behalf of Clients 1,300,753,375 1,576,297,766 Deposit from DP clients 96,000 56,000

DP Charges Received in Advance 782,788 1,192,447

1,869,035,532 2,220,912,083

Other Payables Payable to Holding Company (Ludhiana Stock Exchange Limited) 258,981 82,915 Accrued salaries and benefits 270,486 891,193 Cheques issued but not presented 9,747,066 34,641,484 Expenses Payable 1,555,288 1,650,649 Statutory Liabilities( including Stamp Duty, Tax Deducted at source, Bonus, ESI & EPF) 1,493,456 1,603,546 Other Liabilities 1,442,335 1,446,018

14,767,612 40,315,805

9. Short Term Provisions

Dividend on Equity Shares (Interim) 0 3,207,636 Proposed Dividend on Equity Shares 2,576,710 1,924,582 Dividend on Preference Shares 63,237 63,237 Dividend Distribution Tax 428,331 862,909

3,068,278 6,058,364 11. Non Current Investments

a) Trade Unquoted 130000 Equity Shares (P/Y 130000 Equity Shares) of Rs. 1 Each of Bombay Stock Exchange Limited 10,000 10,000

b) Non Trade Unquoted Units of Mutual Funds - Nil (P/Y 200000 Units@Rs10 Each of UTI FMP 03/11- Growth) 0 2,000,000

10,000 2,010,000

22 10. FIXED ASSETS Amount In ( )

GROSS BLOCK DEPRICIATION NET BLOCK PARTICULARS AS AT ADDITIONS SALE/ AS AT AS AT FOR THE REVERSED AS AT AS AT AS AT 01-04-2011 ADJUST- 31-03-2012 01-04-2011 PERIOD DURING THE 31-03-2012 31-03-2012 31-03-2011 MENT PERIOD A) TANGIBLE ASSETS FURNITURE & FIXTURES 1464589 58701 68992 1454298 1041957 76394 48242 1070109 384189 422632 VEHICLES 5865 0 0 5865 5865 0 0 5865 0 0 OFFICE EQUIPMENT 27983 0 0 27983 19099 1239 0 20338 7645 8884 AIR CONDITIONER 224215 21900 0 246115 115169 17689 0 132858 113257 109046 COOLERS 6330 0 0 6330 4068 316 0 4384 1946 2262 ELECTRONIC EQUIPMENTS 193108 0 0 193108 98783 13157 0 111940 81168 94325 FANS & ELECTRICAL FITTINGS 49691 7020 0 56711 41238 8199 0 49437 7274 8453 FIRE FIGHTING EQUIPMENT 49805 0 0 49805 30142 2743 0 32885 16920 19663 GENERATOR 77497 0 0 77497 50540 3760 0 54300 23197 26957 GLOW SIGN BOARD 59454 0 0 59454 41557 2496 0 44053 15401 17897 REFRIGERATOR 7180 0 0 7180 4622 357 0 4979 2201 2558 TELEPHONE & TELEX 244075 20920 0 264995 161448 12672 0 174120 90875 82627 VSAT SKYEDGE 78000 0 0 78000 41115 5145 0 46260 31740 36885 COMPUTERS 19536369 284792 0 19821161 16918025 1114500 0 18032525 1788636 2618344

TOTAL - A 22024161 393333 68992 22348502 18573628 1258667 48242 19784053 2564449 3450533

B) INTANGIBLE ASSETS COMPUTER SOFTWARE & LICENSES 5460335 0 10000 5450335 4883619 247266 9898 5120987 329348 576716

TOTAL - B 5460335 0 10,000 5450335 4883619 247266 9,898 5120987 329348 576716

TOTAL CURRENT YEAR 27484496 393333 78992 27798837 23457247 1505933 58140 24905040 2893797 4027249

TOTAL PREVIOUS YEAR 25590576 1893920 0 27484496 2142788 2029859 0 23457247 4027249

23 *It represents software written off being no more usable. Amount In ( ) PARTICULARS As At 31.03.2012 As At 31.03.2011

12. Long Term Loans and Advances

Unsecured, Considered Good Security Deposits 48,640,425 47,310,050 Advances to Employees other than Current Maturities 262,949 413,734 Capital Advances 1,000,000 1,000,000

49,903,374 48,723,784

13. Other Non-Current Assets

Planned Gratuity Assets (Net of Gratuity Obligation) 257,196 145,881 Accrued interest on loan to employees other than current maturities 39,596 28,251 Accrued interest on term deposits having remaining maturity more than one year 3,407,901 1,698,116

3,704,693 1,872,248

14. Current investments

a) Non Trade Unquoted Units of Mutual Funds - 200000 Units of Rs.10 Each of UTI FMP 03/11-Growth 2,000,000 0 - 788.661 Units of Rs. 1901.9570 of UTI Money Market Fund 1,500,000 1,500,000 - 100000 Units of Rs.10 Each of Axis Bank Fixed Term Plan -Series 13 0 1,000,000 - 200000 Units of Rs.10 Each of ICICI Pru FMP Series 56 0 2,000,000 - 200000 Units of Rs.10 Each of IDFC FMP- Yearly Series 41 Growth 0 2,000,000 - 200000 Units of Rs.10 Each of Kotak FMP 35 Series- Growth 0 2,000,000 - 200000 Units of Rs.10 Each of Birla Sun Life Fixed Term Plan Series CU Growth 0 2,000,000 - 250000 Units of Rs.10 Each of Reliance Fixed Horizon Fund -XVII Series 0 2,500,000 - 150000 Units of Rs.10 Each of Reliance Fixed Horizon Fund -XIX Series 0 1,500,000 - 100000 Units of Rs.10 Each of Reliance Fixed Horizon Fund -XIX Series 0 1,000,000 - 400000 Units of Rs.10 Each of Reliance Fixed Horizon Fund -XVII Series 0 4,000,000

3,500,000 19,500,000

15. INVENTORY

Others :- Saleable Stationery 20,220 97,765

20,220 97,765

24 Amount In ( ) PARTICULARS As At 31.03.2012 As At 31.03.2011

16. Trade Receivables

Outstanding for a period exceeding six months from the due date of payment - Secured, Considered Good 15,988,215 11,054,520 - Unsecured , Considered Good 10,808,540 8,220,795

26,796,755 19,275,315

Others -Secured, Considered Good 96,326,419 102,765,768 -Unsecured, Considered Good 125,361 190,898

96,451,780 102,956,666

Grand Total 123,248,535 122,231,981

17. Cash and Bank Balances

Cash and Cash Equivalents Cash in hand 32,341 75,612 Bank Balances in Current Accounts 28,052,502 26,683,456

28,084,843 26,759,068

Other Bank Balances Non Current - Term Deposits having remaining maturity of more than one year. 90,187,961 128,400,000

Current - Term Deposits having remaining maturity not more than one year. 135,512,039 194,814,601

225,700,000 323,214,601

GRAND TOTAL 253,784,843 349,973,669

18. Short Term Loans and Advances

Unsecured,Considered Good Advances Recoverable in Cash or in kind or for value to be received-Considered Good 227,828 161,516 Accrued interest on current maturities of loan to employees 21,260 27,242 Current Maturity of Advances to employees 476,064 74,528 Prepaid Expenses 517,233 399,195 Advance Income Tax(net of Provision for Tax) 1,458,059 458,898

2,700,444 1,121,379

25 Amount In ( ) PARTICULARS As At 31.03.2012 As At 31.03.2011

19. Other Current Assets

Accrued interest on deposits with IL & FS 583,015 291,424 Accrued interest on term deposits having remaining maturity less than one year 7,787,845 7,207,910 Income Tax Refund Receivable 3,361,128 3,236,460 Work in progress 0 324,076 Margins Collected by IL & FS 14,040,000 7,340,000 Members FDRs kept as Margin 372,908,762 390,431,339 Members Scrips kept as Margin 114,253,539 113,736,858 Rental Deposits 0 218,600 Scrips held on behalf of clients 1,300,753,375 1,576,297,766

1,813,687,664 2,099,084,433

20. Revenue From Operations

Income from Services rendered Turnover Charges (Net) 15,827,970 17,915,738 Depository Income 12,806,101 13,502,810 Other operating revenue - Relating to Bombay Stock Exchange Limited, Mumbai 226,600 288,900 - Relating to National Stock Exchange Limited, Mumbai 1,075,783 1,465,696

29,936,454 33,173,144

21. Other Income

Dividend on Non current Investment 520,000 520,000 Dividend on current Investment 1,850,192 206,082 Interest Income 22,355,493 21,231,598 (Gross of TDS Rs. 2347775.44 (Previous Year Rs. 2045434.52)

24,725,685 21,957,680

22. Operating Expenses

STOCK EXCHANGE EXPENSES - Relating to Bombay Stock Exchange Limited, Mumbai 438,497 1,043,109 - Relating to National Stock Exchange Limited, Mumbai 969,077 927,012 - Relating to Multi Commodity Stock Exchange Limited 15,758 5,505 - Depository Expenses 1,510,682 2,720,187 - Others 0 12,000

2,934,014 4,707,813

26 Amount In ( ) PARTICULARS As At 31.03.2012 As At 31.03.2011

23. Employee Benefit Expenses

Salaries and Wages 10,456,119 10,048,076 Contribution to provident and other funds 1,201,810 1,171,148 Staff Welfare Expenses 438,757 579,319 Leave Travel Concession 124,203 493,350

12,220,889 12,291,893

24. Finance Cost

Interest Expenses 25,643 899 Other Borrowing Costs 110,100 287,604

135,743 288,502

25. Other Expenses

Advertisement 33,654 5,210 Auditors' Remuneration - Statutory Audit Fee 60,000 55,000 - Out of Pocket Expenses 9,755 11,117 Internal Auditors' Remuneration- Audit Fees 233,200 227,900 Internal Auditors' (Out of Pocket) Expenses 11,400 24,267 System Audit 15,000 15,000 Board Meeting Expenses 25,312 9,692 Bad Debts 10,000 0 Cable TV Expenses 231,300 231,300 Committee meeting expenses 18,000 12,000 Computer Media Charges 25,750 41,188 Computer Hardware / Software and other expenses 3,080,832 3,433,602 Cont to Gratuity Fund 250,213 257,776 Electricty Charges 101,201 107,840 Festival Expenses 442,360 317,824 Filing Fees 14,375 4,100 General Expenses 171,657 62,314 Insurance 195,273 44,631 Lease Line charges 64,800 64,800 Legal and Professional Charges 350,989 190,997 Newspapers and periodicals 6,695 2,098 Office expenses 603,256 528,951 Postage and Courier 438,663 559,397 Printing and stationery 441,616 582,785 Rates and Taxes 1,495 10,886 Rent 4,187,517 3,328,947 Repairs and Maintenance 814,796 162,574 Sitting Fees to Public Representatives 65,000 57,500 Telephone & Telex Charges 713,826 747,679 Travelling and Conveyance-Directors 21,100 22,100 Travelling and Conveyance-others 112,478 67,997

12,751,513 11,187,472

27 N O T E S

28 N O T E S

29 N O T E S

30 LSE SECURITIES LIMITED Registered Office : SCO 50, 1st Floor, Sector 34-A, Chandigarh-160022.

I/We ______of

______in the district of

______being a Member/ Members of M/s. LSE Securities Limited, hereby appoint Mr./Ms. ______of ______of______in the district of ______or failing him, Mr.______of ______in the district of______of______as my /our proxy to attend & vote for me /us on my/our behalf at the 13th Annual General Meeting of the Company, to be held on Saturday, 15th day of September,

2012 at 12:30 P.M. at Hotel Park View, Sector 24, Near Indira Holiday Home, Chandigarh and at any adjournment thereof.

Affix Signed this ______day of ______2012 Signature 15 paise/- Reference Folio No. Revenue No. of shares Stamp

Notes: 1. The proxy, to be effective, should be deposited at the Registered Office of the Company, SCO 50, 1ST Floor, Sector 34-A, Chandigarh 160 022 at least FORTY-EIGHT HOURS before the commencement of the Annual General Meeting. 2. A Proxy need not be a Member of the Company.

31 N O T E S